Pension and Postretirement Benefits

12 Months Ended

Dec. 31, 2012

Employee Stock Ownership Feature of 401 (k) Plan/Pension and Postretirement Benefits [Abstract]

Pension and Postretirement Benefits

Note 15. Pension and Postretirement Benefits

Domestic Plans. Viad has trusteed, frozen defined benefit pension plans that cover certain employees which are funded by the Company. Viad also maintains certain unfunded defined benefit pension plans which provide supplemental benefits to select management employees. These plans use traditional defined benefit formulas based on years of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the minimum funding required by applicable regulations.

Viad also has certain defined benefit postretirement plans that provide medical and life insurance for certain eligible employees, retirees and dependents. The related postretirement benefit liabilities are recognized over the period that services are provided by employees. In addition, Viad retained the obligations for these benefits for retirees of certain sold businesses. While the plans have no funding requirements, Viad may fund the plans.

The components of net periodic benefit cost and other amounts recognized in other comprehensive income of Viad’s pension plans included the following:

	2012			2011			2010
	(in thousands)
Net Periodic Benefit Cost
Service cost	$	104		$	121		$	145
Interest cost		1,150			1,189			1,242
Expected return on plan assets		(406	)		(563	)		(588	)
Amortization of prior service cost		—			—			41
Recognized net actuarial loss		491			457			572
Net periodic benefit cost		1,339			1,204			1,412
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Net actuarial loss		1,942			1,589			1,190
Reversal of amortization item:
Net actuarial loss		(491	)		(457	)		(572	)
Prior service cost		—			—			(41	)
Total recognized in other comprehensive income		1,451			1,132			577
Total recognized in net periodic benefit cost and other comprehensive income	$	2,790		$	2,336		$	1,989

The components of net periodic benefit cost and other amounts recognized in other comprehensive income of Viad’s postretirement benefit plans included the following:

	2012			2011			2010
	(in thousands)
Net Periodic Benefit Cost
Service cost	$	146		$	128		$	130
Interest cost		814			868			1,039
Expected return on plan assets		(74	)		(135	)		(160	)
Amortization of prior service credit		(1,113	)		(1,277	)		(1,171	)
Recognized net actuarial loss		547			533			608
Net periodic benefit cost		320			117			446
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Net actuarial loss		224			24			421
Prior service credit		—			—			(1,197	)
Reversal of amortization item:
Net actuarial loss		(547	)		(533	)		(608	)
Prior service credit		1,113			1,277			1,171
Total recognized in other comprehensive income (loss)		790			768			(213	)
Total recognized in net periodic benefit cost and other comprehensive income	$	1,110		$	885		$	233

The following table indicates the funded status of the plans as of December 31:

													Postretirement
	Funded Plans						Unfunded Plans						Benefit Plans
	2012			2011			2012			2011			2012			2011
	(in thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	13,938		$	12,853		$	10,883		$	10,352		$	18,667		$	18,987
Service cost		—			—			104			121			146			128
Interest cost		659			678			491			511			814			868
Actuarial adjustments		1,419			1,157			799			609			250			106
Plan amendments		—			—			—			—			—			—
Benefits paid		(668	)		(750	)		(707	)		(710	)		(1,176	)		(1,422	)
Benefit obligation at end of year		15,348			13,938			11,570			10,883			18,701			18,667
Change in plan assets:
Fair value of plan assets at beginning of year		9,846			8,858			—			—			2,118			2,678
Actual return on plan assets		683			741			—			—			100			217
Company contributions		763			997			707			710			355			645
Benefits paid		(668	)		(750	)		(707	)		(710	)		(1,176	)		(1,422	)
Fair value of plan assets at end of year		10,624			9,846			—			—			1,397			2,118
Funded status at end of year	$	(4,724	)	$	(4,092	)	$	(11,570	)	$	(10,883	)	$	(17,304	)	$	(16,549	)

The net amounts recognized in Viad’s consolidated balance sheets under the caption “Pension and postretirement benefits” as of December 31 were as follows:

									Postretirement
	Funded Plans				Unfunded Plans				Benefit Plans
	2012		2011		2012		2011		2012		2011
	(in thousands)
Other current liabilities	$	—	$	—	$	816	$	717	$	392	$	440
Non-current liabilities		4,724		4,092		10,754		10,166		16,912		16,109
Net amount recognized	$	4,724	$	4,092	$	11,570	$	10,883	$	17,304	$	16,549

Amounts recognized in accumulated other comprehensive income as of December 31, 2012 consisted of:

	Funded			Unfunded			Postretirement
	Plans			Plans			Benefit Plans			Total
	(in thousands)
Net actuarial loss	$	9,052		$	4,548		$	6,706		$	20,306
Prior service credit		—			—			(2,900	)		(2,900	)
Subtotal		9,052			4,548			3,806			17,406
Less tax effect		(3,433	)		(1,725	)		(1,443	)		(6,601	)
Total	$	5,619		$	2,823		$	2,363		$	10,805

Amounts recognized in accumulated other comprehensive income as of December 31, 2011 consisted of:

	Funded			Unfunded			Postretirement
	Plans			Plans			Benefit Plans			Total
	(in thousands)
Net actuarial loss	$	8,238		$	3,911		$	7,029		$	19,178
Prior service credit		—			—			(4,013	)		(4,013	)
Subtotal		8,238			3,911			3,016			15,165
Less tax effect		(3,146	)		(1,493	)		(1,153	)		(5,792	)
Total	$	5,092		$	2,418		$	1,863		$	9,373

The estimated net actuarial loss for the pension plans that is expected to be amortized from accumulated other comprehensive income into net periodic pension cost in 2013 is approximately $597,000. The estimated net actuarial loss for the postretirement benefit plans that is expected to be amortized from accumulated other comprehensive income into net periodic benefit cost in 2013 is approximately $566,000. The estimated prior service credit for the postretirement benefit plans that is expected to be amortized from accumulated other comprehensive income into net periodic benefit credit in 2013 is approximately $901,000.

The fair value of the domestic plans’ assets by asset class was as follows:

			Fair Value Measurements at December 31, 2012
					Significant
			Quoted Prices		Other		Significant
			in Active		Observable		Unobserved
			Markets		Inputs		Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
Domestic Pension Plans:
Cash	$	10,401	$	10,401	$	—	$	—
Other		223		—		223		—
	$	10,624	$	10,401	$	223	$	—
Postretirement Benefit Plans:
Cash	$	1,397	$	1,397	$	—	$	—

			Fair Value Measurements at December 31, 2011
					Significant
			Quoted Prices		Other		Significant
			in Active		Observable		Unobserved
			Markets		Inputs		Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
Domestic Pension Plans:
U.S. equity securities	$	2,849	$	—	$	2,849	$	—
International equity securities		914		—		914		—
Aggregate fixed income securities		2,373		—		2,373		—
Long-term fixed income securities		3,412		—		3,412		—
Cash		72		72		—		—
Other		226		—		226		—
	$	9,846	$	72	$	9,774	$	—
Postretirement Benefit Plans:
U.S. equity securities	$	283	$	—	$	283	$	—
International equity securities		89		—		89		—
Aggregate fixed income securities		1,034		—		1,034		—
Long-term fixed income securities		490		—		490		—
Cash		222		222		—		—
	$	2,118	$	222	$	1,896	$	—

The significant amount of investments held in cash in the domestic pension and postretirement plans as of December 31, 2012 was due to a change in the investment custodian during December 2012. All securities held by the previous custodian were liquidated to cash and transferred to the new custodian on December 26, 2012. During January and February 2013, the new custodian invested the plans’ assets in a mix of equities and fixed income securities approximating the same mixes as on December 31, 2011.

Viad employs a total return investment approach whereby a mix of equities and fixed income securities is used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income securities. Furthermore, equity securities are diversified across U.S. and non-U.S. stocks, as well as growth and value. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews and annual liability measurements.

Viad utilizes a building-block approach in determining the long-term expected rate of return on plan assets. Historical markets are studied and long-term historical relationships between equity securities and fixed income securities are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio return also considers diversification and rebalancing. Peer data and historical returns are reviewed relative to Viad’s assumed rates for reasonableness and appropriateness.

The following pension and postretirement benefit payments, which reflect expected future service, as appropriate, are expected to be paid, as well as the Medicare Part D subsidy expected to be received:

					Postretirement		Medicare
	Funded		Unfunded		Benefit		Part D Subsidy
	Plans		Plans		Plans		Receipts
	(in thousands)
2013	$	784	$	832	$	1,768	$	268
2014		762		810		1,760		272
2015		791		795		1,744		273
2016		737		771		1,719		273
2017		774		794		1,647		271
2018-2022		4,200		4,181		7,434		1,267

Foreign Pension Plans. Certain of Viad’s foreign operations also maintain trusteed defined benefit pension plans covering certain employees which are funded by the companies, and unfunded defined benefit pension plans providing supplemental benefits to select management employees. These plans use traditional defined benefit formulas based on years of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the minimum funding required by applicable regulations. The components of net periodic benefit cost and other amounts recognized in other comprehensive income included the following:

	2012			2011			2010
	(in thousands)
Net Periodic Benefit Cost
Service cost	$	491		$	366		$	304
Interest cost		737			729			780
Expected return on plan assets		(622	)		(665	)		(597	)
Recognized net actuarial loss		201			73			54
Net periodic benefit cost		807			503			541
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Net actuarial loss		958			1,936			299
Reversal of amortization of net actuarial loss		(201	)		(73	)		(54	)
Total recognized in other comprehensive income		757			1,863			245
Total recognized in net periodic benefit cost and other comprehensive income	$	1,564		$	2,366		$	786

The following table represents the funded status of the plans as of December 31:

	Funded Plans						Unfunded Plans
	2012			2011			2012			2011
	(in thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	13,141		$	11,453		$	2,939		$	2,929
Service cost		491			366			—			—
Interest cost		607			583			130			146
Actuarial adjustments		1,086			1,421			113			173
Benefits paid		(328	)		(351	)		(220	)		(231	)
Translation adjustment		390			(331	)		70			(78	)
Benefit obligation at end of year		15,387			13,141			3,032			2,939
Change in plan assets:
Fair value of plan assets at beginning of year		11,028			10,834			—			—
Actual return on plan assets		860			100			—			—
Company contributions		1,111			709			220			231
Benefits paid		(328	)		(351	)		(220	)		(231	)
Translation adjustment		326			(264	)		—			—
Fair value of plan assets at end of year		12,997			11,028			—			—
Funded status at end of year	$	(2,390	)	$	(2,113	)	$	(3,032	)	$	(2,939	)

As of December 31, 2012 and 2011, the foreign funded plans had liabilities of $2.4 million and $2.1 million, respectively. The unfunded plans had liabilities of $3.0 million and $2.9 million at December 31, 2012 and 2011, respectively. These amounts are each included in the consolidated balance sheets under the caption “Pension and postretirement benefits.”

The net actuarial losses for the foreign funded plans as of December 31, 2012 and 2011 were $5.3 million ($3.9 million after-tax) and $4.6 million ($3.4 million after-tax), respectively. The net actuarial losses as of December 31, 2012 and 2011 for the foreign unfunded plans were $366,000 ($271,000 after-tax) and $269,000 ($199,000 after-tax), respectively.

The fair value of the foreign pension plans’ assets by asset category were as follows:

			Fair Value Measurements at December 31, 2012
Description	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobserved Inputs (Level 3)
	(in thousands)
U.S. equity securities	$	1,185	$	1,185	$	—	$	—
International equity securities		4,871		4,494		377		—
Canadian fixed income securities		6,744		6,744		—		—
Other		197		197		—		—
	$	12,997	$	12,620	$	377	$	—

			Fair Value Measurements at December 31, 2011
Description	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobserved Inputs (Level 3)
	(in thousands)
U.S. equity securities	$	977	$	977	$	—	$	—
International equity securities		3,995		3,639		356		—
Canadian fixed income securities		5,975		5,975		—		—
Other		81		81		—		—
	$	11,028	$	10,672	$	356	$	—

The following payments, which reflect expected future service, as appropriate, are expected to be paid:

	Funded		Unfunded
	Plans		Plans
	(in thousands)
2013	$	385	$	219
2014		492		218
2015		612		218
2016		616		217
2017		619		216
2018-2022		3,707		1,066

Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets. The accumulated benefit obligations in excess of plan assets as of December 31 were as follows:

	Domestic Plans
	Funded Plans				Unfunded Plans
	2012		2011		2012		2011
	(in thousands)
Projected benefit obligation	$	15,348	$	13,938	$	11,570	$	10,883
Accumulated benefit obligation		15,348		13,938		11,322		10,589
Fair value of plan assets		10,624		9,846		—		—

	Foreign Plans
	Funded Plans				Unfunded Plans
	2012		2011		2012		2011
	(in thousands)
Projected benefit obligation	$	15,387	$	13,141	$	3,032	$	2,939
Accumulated benefit obligation		14,307		12,049		3,032		2,939
Fair value of plan assets		12,997		11,028		—		—

Contributions. In aggregate for both the domestic and foreign plans, the Company anticipates contributing $1.7 million to the funded pension plans, $1.1 million to the unfunded pension plans and $400,000 to the postretirement benefit plans in 2013.

Weighted-Average Assumptions. Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:

	Domestic Plans
	Funded Plans						Unfunded Plans						Postretirement Benefit Plans						Foreign Plans
	2012			2011			2012			2011			2012			2011			2012			2011
Discount rate		4.11	%		4.92	%		3.80	%		4.75	%		3.85	%		4.70	%		4.06	%		4.60	%
Rate of compensation increase		N/A			N/A			4.50	%		4.50	%		N/A			N/A			3.00	%		3.00	%

Weighted-average assumptions used to determine net periodic benefit cost were as follows:

	Domestic Plans
													Postretirement
	Funded Plans						Unfunded Plans						Benefit Plans						Foreign Plans
	2012			2011			2012			2011			2012			2011			2012			2011
Discount rate		4.93	%		5.45	%		4.75	%		5.10	%		4.70	%		5.10	%		4.65	%		5.10	%
Expected return on plan assets		4.20	%		6.35	%		N/A			N/A			4.65	%		6.10	%		5.45	%		5.50	%
Rate of compensation increase		N/A			N/A			4.50	%		4.50	%		N/A			N/A			3.00	%		3.00	%

The assumed health care cost trend rate used in measuring the December 31, 2012 accumulated postretirement benefit obligation was 8.5 percent, declining one-half percent each year to the ultimate rate of five percent by the year 2019 and remaining at that level thereafter. The assumed health care cost trend rate used in measuring the December 31, 2011 accumulated postretirement benefit obligation was nine percent, declining one-half percent each year to the ultimate rate of five percent by the year 2019 and remaining at that level thereafter.

A one-percentage-point increase in the assumed health care cost trend rate for each year would increase the accumulated postretirement benefit obligation as of December 31, 2012 by approximately $1.8 million and the total of service and interest cost components by approximately $120,000. A one-percentage-point decrease in the assumed health care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as of December 31, 2012 by approximately $1.5 million and the total of service and interest cost components by approximately $97,000.

Multi-employer Plans. Viad contributes to defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. The financial risks of participating in these multi-employer pension plans generally include the fact that assets contributed to the plan by one employer may be used to provide benefits to employees of other participating employers. Furthermore, if a participating employer ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. In addition, if Viad were to discontinue its participation in some of its multi-employer pension plans, the Company may be required to pay those plans a withdrawal liability amount based on the underfunded status of the plan. Viad also contributes to defined contribution plans pursuant to its collective-bargaining agreements, which are generally not subject to the funding risks inherent in defined benefit pension plans. The overall level of Viad’s contributions to its multi-employer plans may significantly vary from year to year based on the demand for union-represented labor to support the Company’s operations. Viad does not have any minimum contribution requirements for future periods pursuant to its collective-bargaining agreements for individually significant multi-employer plans.

Viad’s participation in multi-employer pension plans for the year ended December 31, 2012, is outlined in the following table. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2012 and 2011 relates to the plan’s year end as of December 31, 2011 and 2010, respectively, and is based on information received from the plan. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented.

			Plan		Pension Protection Act Zone Status		FIP/RP Status Pending/		Viad Contributions						Surcharge		Expiration Date of Collective- Bargaining
Pension Fund	EIN		No.		2012	2011	Implemented		2012		2011		2010		Paid		Agreement(s)
											(in thousands)
Western Conference of Teamsters Pension Plan		91-6145047		001	Green	Green		No	$	5,694	$	5,720	$	4,551		No		11/30/13 to 3/31/15
Southern California Local 831—Employer Pension Fund (1)		95-6376874		001	Green	Green		No		2,358		2,232		1,870		No		8/31/2014
National Electrical Benefit Fund		53-0181657		001	Green	Green		No		1,814		1,691		1,313		No		5/31/14 to 6/16/14
Chicago Regional Council of Carpenters Pension Fund (2)		36-6130207		001	Yellow	Yellow		Yes		1,749		1,411		1,018		No		5/31/13 to 5/31/14
Southwest Carpenters Pension Trust		95-6042875		001	Green	Green		No		944		1,031		867		No		6/30/2015
Machinery Movers Riggers & Mach Erect Local 136 Supplemental Retirement Plan  (1) (2)		36-1416355		001	Red	Red		Yes		930		386		710		No		6/30/2014
Central States, Southeast and Southwest Areas Pension Plan		36-6044243		001	Red	Red		Yes		874		725		717		No		3/31/13 to 7/31/15
New England Teamsters & Trucking Industry Pension (3)		04-6372430		001	Red	Red		Yes		334		339		290		No		3/31/2017
Steelworkers Pension Trust		23-6648508		499	Green	Green		No		326		422		425		No		3/31/13 to 2/28/15
All other funds (4)										3,645		3,752		2,119
Total contributions to defined benefit plans										18,668		17,709		13,880
Total contributions to other plans										2,001		1,892		1,469
Total contributions to multi-employer plans									$	20,669	$	19,601	$	15,349

(1) The Company contributed more than 5 percent of total plan contributions for the 2011 and 2010 plan years based on the plans’ Forms 5500.

(2) Zone status as of 6/30/11 and 6/30/10.

(3) Zone status as of 9/30/11 and 9/30/10.

(4) Represents participation in 39 pension funds during 2012.

Other Employee Benefits. Costs of the 401(k) Plan and other benefit plans totaled $1.7 million, $1.3 million and $1.6 million in 2012, 2011 and 2010, respectively.